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Why Would DISH Want to Acquire LightSquared's Spectrum?

Washington, D.C.

After receiving FCC approval to use its 2 GHz spectrum for terrestrial operations, DISH Network Corporation, the satellite television provider owned by Charlie Ergen, has emerged as a key player in the wireless space. As part of an aggressive push to expand its spectrum holdings to offer both voice and Internet services to complement its current TV offering, DISH is seeking to acquire LightSquared’s spectrum assets. DISH offered to purchase the bankrupt carrier’s frequency allocations for $2.2 billion in May and DISH’s CEO Ergen is said to have purchased more than $1 billion in LightSquared’s secured debt in a further attempt to acquire LightSquared’s spectrum.

DISH’s current spectrum holdings – 40 MHz at 2000-2020 MHz (uplink) and 2180-2200 MHz (downlink) – are adjacent to the downlink PCS H Block. The juxtaposition of uplink next to downlink creates a risk of harmful interference and the FCC’s current rules limiting interference into PCS effectively require DISH to dedicate up to 5 MHz of their uplink spectrum as a guard band for PCS H Block, as shown here:

If DISH wants to recapture that five megahertz block for its own use, one potential option is to request a reversal of the uplink and downlink operations, as shown here:

This proposal removes interference concerns emanating from the H Block and could result in DISH competing vigorously for H Block spectrum in the upcoming auction. However, this proposal creates new concerns because, under this approach, the AWS J Block downlink would be adjacent to DISH’s uplink. By acquiring LightSquared’s spectrum, though, DISH could make all of its current spectrum downlink, pair that with LightSquared’s current uplink spectrum, and so resolve its interference concerns, as shown here:

DISH has the option of pursuing many attractive spectrum configurations. And activity in these bands seems likely only to increase especially as the H Block auction is scheduled to begin as soon as January 24, 2014.